Stock market bloodbath wipes £36 billion off FTSE 100

Over £36 billion was wiped of London’s blue chip index on Thursday amid a painful global sell-off as US President Donald Trump hit out at “crazy” US interest rate hikes.

The FTSE 100 Index ended the day down 1.9% or 138.81 points at 7,006.93, taking it to the lowest level since the end of March.

It was also the largest one-day drop for the index since June 25, when it fell 2.2%.

Peers in mainland Europe also took a hit, with the French Cac 40 and German Dax falling around 1.9% and 1.5%, respectively.

The stock market bloodbath follows the biggest drop overnight on Wall Street in eight months, with a decline of more than 830 points on the Dow Jones Industrial Average, which sparked hefty losses across Asia.

Further declines hit the Dow on Thursday, with the index falling a further 100 points in early trading.

Investors have been sent heading for the exit on concerns over rising US bond yields, with the US’s massive borrowing looking vulnerable given the costs of servicing the debt.

Mr Trump dismissed the rout as a long-overdue correction, but told reporters the US Federal Reserve was “crazy” for hiking interest rates too fast.

But markets have also become jittery over mounting trade tensions between the US and China, which could hit global demand.

Connor Campbell, financial analyst at Spreadex, said: “The European open was a proper, old-fashioned bloodbath, reminiscent of the drastic sell-off seen back in February.”

Michael Hewson, chief market analyst at CMC Markets, added: “US markets look set to pick up where they left off last night in the wake of today’s continuation of selling pressure with further losses looking likely.”

In London, housebuilders were among those bearing the brunt of the sell-off, with Barratt Developments down 12% or 67.4p at 487.8p.

It was the worst performer on the FTSE 100.

Retailer WH Smith was a big casualty in the FTSE 250 Index, down 11.5% or 234p at 1,800p after it unveiled an overhaul of its under-pressure high street business following sliding sales and profits at the division.

WH Smith shares suffered on Thursday (PA)

One-off costs of the review sent group pre-tax profits down 4% to £134 million for the year to August 31.

But with these costs stripped out, underlying pre-tax profits rose 4% to £145 million thanks to another impressive performance from its travel business.

Defensive stocks, including gold and silver miners, were among a shortened list of top tier risers, with Fresnillo ahead 8.6% or 66.8p at 839p.

International Airlines Group (IAG) shares were down 1.6% or 9.6p at 581.8p after announcing that the chief executive of Aer Lingus Stephen Kavanagh will step down in January after four years at the helm of the Irish carrier.

He will be succeeded by Sean Doyle, who is currently director of network, fleet and alliances at fellow IAG-owned firm British Airways.

In currency markets, the pound was struggling to make gains, falling 0.3% against the euro to 1.140.

Sterling was marginally lower against the US dollar, down around 0.05% at 1.319.

Brent crude prices followed stocks into the red, slipping around 1.7% as data from the Energy Information Administration showed a rise in US crude inventories.

The biggest risers on the FTSE 100 were Fresnillo up 66.8p at 839p, Randgold Resources up 440p at 5,706p, Ocado Group up 17p at 779.4p, and Ferguson up 98p at 5,567p.

The biggest fallers on the FTSE 100 were Barratt Developments down 67.4p at 487.8p, Hargreaves Lansdown down 97.5p at 1,850.5p, 3I Group down 43.2p at 849.4p, and Next down 248p at 5,254p.